Banking

Hedge-fund inflows surge in October

Industry saw largest net inflow since November 2009: HedgeFund.net

By

AlistairBarr

SAN FRANCISCO (MarketWatch) — The hedge-fund industry saw the biggest inflows of capital in almost a year during October as investors gained confidence from signs of economic stabilization and strong market gains, according to estimates released Monday by HedgeFund.net.

Investors plowed a net $18.4 billion into hedge funds last month, the largest inflow since November 2009, HedgeFund.net said.

October’s inflows were up from $12.2 billion in September, $6.73 billion in August, $7.72 billion in July and a net outflow of $2.54 billion in June, according to HedgeFund.net data.

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“The continuation of net inflows is an important sign of support as the trend in the first half of the year was of declining rates of growth,” HedgeFund.net said in a statement.

The stock market and credit markets surged in September and October amid signs of economic stabilization in the U.S. and ahead of a new effort to stimulate growth by the Federal Reserve.

Hedge funds tracked by HedgeFund.net returned 2.23% on average in October, leaving them up 7.43% during the first 10 months of 2010. The Standard & Poor’s 500 Index jumped 3.8% in October, leaving it up 7.84% in the same period.

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